Skip to main content

About this Show

Broadband Economic Growth

Series/Special. Former members of the Federal Communications Commission discuss energy and broadband investment opportunities. New.

NETWORK

DURATION
01:40:00

RATING

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Channel 91 (627 MHz)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
704

PIXEL HEIGHT
480

TOPIC FREQUENCY

Blair 17, U.s. 17, United States 7, America 7, New America 6, Us 5, Obama 4, Sec 4, Obama Administration 3, Kansas City 3, Chicago 3, Personalization 2, Blair Levin 2, Ben Franklin 2, At&t 2, Comcast 2, Clinton 2, Washington 2, China 2, Kerridge 1,
Borrow a DVD
of this show
  CSPAN    Broadband Economic Growth    Series/Special. Former members of the Federal  
   Communications Commission discuss energy and broadband investment...  

    September 8, 2012
    4:50 - 6:30pm EDT  

4:50pm
failure has come at a great cost to our country and our future. the president's polices have failed to produce the results, accountability and solutions the american people deserve. the obama administration is simply not moving our country forward. it's been said that faced with his record the president has changed his hope and change from four years ago to one of divide and conquer today. more presidential rhetoric and a plea for more time won't heal our economy. a healthy economy comes from a growing private sector. yet the president doesn't seem to appreciate or value the private sector. remember, he said if you have a business, you didn't build it? someone else did? in wyoming and in communities all across the country there are bakers and florists and farmers who did build their businesses and whose families have been working in them for generations. those business owners know what president obama does not
4:51pm
they understand, as ronald reagan put it, that you can't be for big government, big taxes, and big bureaucracy, and still be for the little guy. as a nation, we are being bled by overspending. choked by everregulation. and paralyzed by a lack of affordable energy. just look at the president's health care law. the american people knew what they wanted from health care reform. they wanted the care they need from the doctor they choose, at a lower cost. instead, they got a $700 billion cut to medicare, a government mandate that everyone must buy insurance, funding from irs agents to investigate you, but too little money for doctors to treat you. the american people want energy security yet the president continues to block the keystone pipeline and the jobs that come with it. the american people want financial security for their children. but washington has piled a
4:52pm
mountain of debt on the backs of future generations. and the president just keeps adding more. on his watch, the national debt just passed $16 trillion. president obama says he deserves a grade of incomplete on his handling of the economy. but people only ask for an incomplete when they know they're failing. he's now asking you to give him more time. the question is, can we afford to give him that time. republicans have the solutions to help create jobs and get our economy going in the right direction again. instead of giving president obama four more years to continue the polices that are not working, it's time for a change. thank you for joining me today. >> in four weeks the first of the presidential debates live on c-span, c-span radio and c-span.org, watch and engage. next, a discussion on spurring economic growth through investment in the energy and broadband sectors.
4:53pm
followed by the communicators with journalists discussing upcoming telecommunications legislation. and later, a round table debate on the energy polices of president obama and mitt romney. >> next a look at the future of the energy and broadband sectors, and investment opportunities. they debate the role of tax and taxation and take questions about the growth of mobile broadband throughout the united states. this is an hour and 40 minutes. >> good afternoon, everyone, thank you for coming. my name is benjamin bennett, policy director for the new america foundation for open technology institute. before we get started today let me say a few days about new america. new america is a nonprofit, nonpartisan public policy institute that invests in
4:54pm
newsmakers and newods -- ideas to address the new generation of challenges addressing the united states, we have programs that work on a range of public policy issues, including national security, education, health care, and economic growth. my program, the open technology institute, formulates polices to support open networks and open source innovations, we promote universal and affordable communications access to partnerships with communities, researchers, industry, and public interest groups. and we are committed to maximizing the potentials of open technologies for poor, rural and other underserved constituencies. today's discussion upgrading america, better, faster, cheaper broadband, energy, involve two essential pillars of economic growth in keeping the u.s. competitive in the 21st century. at the open technology institute, we have long been examining the just broadband, u.s. consume irs pay more for broadband than other nation, even the most deniesest
4:55pm
cities are lagging behind other world leaders. as a recent report from oti that examined broadband prices in cities here and abroad, u.s. was near the bottom in affordability and offerings in major cities like new york and los angeles are substantially behind hong kong, amsterdam, copenhagen and tokyo, many of the countries have aggress -- pursued aggressive technologies, such as open access nonbundling, greater public investment in network infrastructure by local and national governments. in the u.s., competition in the residential and small business market is dwindling. the recently approved purchase of section by verizon by several of the largest cable companies, along with joint marketing and operating agreements, singling an end to broadband competition, both verizon and at&t have. -- leaving cable companies as the only future high speed option for consumers and
4:56pm
small businesses, and 3/4 of the nation going forward. there are some bright spots for the u.s. national education and research networks including the national land to rail internet two are pushing the boundaries of networking speeds, publicly owned and community networks in shat chattanooga, lafayette and bristol, virginia are offering world class speeds and connectivity to residents of small businesses, as are a few private entities, private sector deployment by google, fiber, in kansas city. and mobile ongoing 4g upgrades to increase the capacity of those networks and make more efficient use of spectrum providing consumers with substantially higher speeds. however, the two largest mobile providers, despite possessing largely vaster amounts of spectrum than smaller rivals continue to use smaller plans to discourage users from using too many applications and services. in terms of energy we've made significant investments in
4:57pm
renewables technologies, 30 states have set renewable targets, the challenge going forward is to determine polices that can accelerate the technology itself, as well as new models to spur adoption by utilities, businesses, and consumers. we have a distinguished and expert panel to discuss these challenges and issues today. we will begin with the presentation by reed hunt and blair levin, based on their forthcoming e book, faster, better, cheaper, a user's guide to post-election politics. reed hunt is a form chairman of the federal communications commission, and currently a principal of reh advisers and ceo of the coalition for green capital. blair levin was the principal author of the sec national broadband plan and is currently the founder and executive director for gigu, the university community next generation innovation project. then we will hear brief spropbss from mark cooper, chief economist from the consumer federation of
4:58pm
america, we will also hear from harold furgot roth, a former commissioner of the federal communications commission and currently a senior fellow acted hudson institute and finally, my colleague, michael calabres, director of the futures project. after hearing from the respondents i will open the panel to the audience for additional questions as time permits. without further adieu, let us begin with reed hunt. >> thank you very much. hello everybody, thank you for making it here. i am going to talk to you about energy and blair will talk to you about communications services. but we're both talking to you about a conversation that we have been having with each other, and want to invite you into. we've been having this conversation for about a year. in our own conversations, we all it the politics of abundance.
4:59pm
we read a book by thomas edsel, a terrific writer, called the politics of scarce ity. and the book, which is very well written, is an excellent reflection of many of the conversations that have been going on inside the beltway for the last couple of years that i think boil down to a debate on the one side of -- let's call it from the left, that says that the economy is in really bad shape, we've got to find ways to use the power of government to invest in activities that get our economy heading in the right direction, and then on the right, i would say the argument is government would be unavailing, and in any case, we don't have the resources to follow that policy, even if we agreed with it. the problem with this
5:00pm
discussion as we've heard it is that it is not consistent with any of the experiences that blair and i have had in what i will call the private sector for the last decade. i've spent almost one or two weeks of every month for the last decade flying to silicon valley, working with different companies, and i've spent the last 3 1/2 years running a nonprofit involved in the clean tech area. .
5:01pm
the way you talk about that is for spending a dollar, how much more clean electricity do you get. ciller has been on the curve -- solar has been on a curve for the last four or five years. the other huge factor that is understood but maybe not fully translated into policy is that now in the united states, thank you to -- thanks to the use of supercomputers to discover sources of natural gas that
5:02pm
previously were not able to be found and i could not be extracted even when they were found, we now have seen in the united states than natural gas presence has dropped from $12,000 per 1,000 to defeat to less than $2,000 in four years. so we have this -- cubic feat to less than $2,000 in four years. that is the beginning. we have seen tremendous innovation in batteries. it is the case that it battery pricing drops by another 50%, than any car you plugged in for fuel, whether a hybrid or an all electric vehicle, when batteries drop another 50% time, it would
5:03pm
be price competitive with the corresponding internal combustion gas driven car. battery pricing is on a curve were able drop by more than 50% before the end of this decade. this means that just like china, we could if we wanted to, begin the conversion of our more than 200 million gas driven vehicles to a fleet that was elected and driven. it's better prices continue to travel -- if price continue to travel on the downward path, and electrical vehicles will be superior to internal combustion engines. you buy a car that needs gas, it always need gas. you buy a car that needs electricity and if the current numbers for electricity relative to gas, you can start an
5:04pm
electric vehicle for about a third of the cost. if you look at the distance the car to travel, it cost about three times as much to fill it up with gas as it does to chart it. so you always have that constant -- to charge it. to you always have that constant advantage. solar is going down, natural gas is going down. the battery is going down. there are many other examples, all of which are a function of the focus of technology on the energy sector, coupled with the adoption of some extremely positive policies for loaning money and for not charging taxes to start up enterprises in the clean technology area. these policies were embodied in the stimulus bill.
5:05pm
more money was loaned out and more money was spent in research in the stimulus bill than in the previous two decades. the results were fantastic advantage as the four years of the first time of the obama administration. if you ask the following question in the energy sector, are we better off now than we were four years ago, the answer is it is astounding how much better off we are. we are on the edge of energy independence. all of the curves i have told you are heading in the right direction. everything that is supposed to be going up is going up. the total size of the renewal energy industry in the united states has almost double the in for years. the story is fantastic. it is a story of abundance. instead of focusing exclusively on assumptions of scarcity, it would be a wonderful thing if
5:06pm
right after the election, everybody in washington focused on how to take all of the things that are doubling and double down on them. that is what we have written in our e-book. titled faster, better, cheaper. it will be published the day after the election as a open letter to the winner of the election. we are kind of confidence that it will be sent to the reelected president obama. but the point here is not a partisan point. it is a point about how the discussion for the united states, starting right after the election, can be and should be a discussion about how to have a growth strategy. not a debate in which we decide how little can government do, a little more than a little? a little more than that?
5:07pm
less than a lot? rather, what is the role of government in unleashing the opportunities to take advantage of the potential for abundance? specifically, in the energy sector. i will make a few more comments and then turn it over to blair. our thesis in our working draft, one of the purposes of this gathering is for you all to ask questions and help us fix the working draft. our thesis is this -- the united states presidents, however the country decides to elect, will believe that the government not take national champions. but that does not mean the president should have no sense of strategy. but president is the president of a government that was able to put a vehicle on the surface of
5:08pm
mars and the cost of about $3 billion. the president can get the advice to make fundamental strategic decisions about the sectors of this economy that deserve the policy attention because they are the areas where we are going to have significant opportunities for growth. there are two platforms. this to platforms of the two electromagnetic wave platforms. they are the platform of knowledge, sometimes called black -- broadband and they are the platform of power. that is the need to have a sustainable base non-polluting power at a low price. that is an input to every single form of human activity. we had the opportunity to have
5:09pm
faster, better, cheaper power affected almost immediately and extending to the end of time. cheaper actually means cheaper. i am on the board of the connecticut green bank. their electors to the prices were 17 cents a kilowatt hour a year ago, they are now 15 cents. it is still too high but going in the right direction. all that changes that are possible in terms of abundance are about delivering electricity cheaper. better means it would be truly sustainable, it would not have externalities'. it would not create pollution lead somewhere generates other costs. faster means we need to do all this much more quickly them a currently are. that is for two reasons -- climate change. 2011, the world set a record for
5:10pm
admissions. we currently are as a world on a path in which the maximum amount of greenhouse gases that can be tolerated without raising the global temperature more than two degrees centigrade is about 16- 18 years. when that limit is hit and these greenhouse gases take us over two degrees centigrade, there are two things to be said about that fact. of all the things, the only one we have agreed to is this -- we do not go above two degrees centrigrade without running risks that are as catastrophic for anyone alive or anyone who might be alive in future years. we dare not go above an increase in 2 degrees centrigrade.
5:11pm
we have 1.2 degrees left. the second thing that all the nations in the world have agreed to is this -- no collective treaty to deal with this problem. there are two countries in the world that need to get on the faster, better, cheaper plan for energy. the two countries in the biggest in the world for admissions -- emissions. one is the in that state, the other is china. these two countries in terms of their current energy footprint are extremely similar. both depend on a carbon based in relatively polluting fuel for about 75% of their energy.
5:12pm
we have about 20% nuclear. they do not. they have hydro as that of nuclear. we have about the same percentage of renewable which is hardly any. double what it was four years ago in both cases but hardly any. we both need to vastly accelerate faster and faster our commitment to renewable and we both need to vastly accelerate our research and development and how to clean the admissions -- emissions from all the carbon based fuels. we have to take the lead in the united states to get them to take the lead and that is good for our business is because we will be talking about export markets. this is the path that no reasonable people disagree on. the fundamental direction no one disagrees on. instead of as all saying there is no way to get there, technology and private sector investment is on the verge of taking us there. it can be cheaper, it can be
5:13pm
better, and it can be faster that we move to be sustainable energy platform. that as well but we are trying to write about and talking about today. the other platform will be dealt with by my friend and former colleague, blair. [applause] >> in thinking about the platform that we sometimes call broadband but think about the applications on top, we should also recognize we are better off the war four years ago with wired broadband, we have now we did not have a four years ago -- a platform that can deliver 100 megan -- megabits. our country leads in 3g uses. we lead in os.
5:14pm
and the 4g build out. a preemptive strike here. harold wrote a good piece of recommend to everyone, i just the we disagree with it. he said that continuing -- as to wireless, it was the private entrepreneurs who build it. there is truth to that in terms of the necessity of private capital and technological advancement but they are building it on a spectrum platform cleared by the government based on a decision made back we got to the fcc. the transition was a post and maybe in 2023. it ended before that because it is a spectrum that at&t and the rise and -- and verizon are building their 4g never on. terminating access charges were being charged that the lead to a
5:15pm
reasonable rate. the reason i say that partly is to start the debate. certain sides have to do certain things. one of the obligations of government is to make sure there is available spectrum for that sector. i have to do a little shout out to michael who has done a fantastic or a -- work with the report that came out this spring talking about spectrum to schering -- spectrum sharing. we are improving and adoption. as we said, what we recommend is
5:16pm
a strategy of doubling down where we have the potential of doubling up. in the book, we talk about how we have done a lot but there is more to be done and there are tremendous opportunities for digital platforms. it is a platform the united states largely created. we have a lot of iconic company still headquartered here. the key is to take advantage of the opportunity is not present. it is a platform that is always improving. every day it gets better. whether it be watching how to will get better or facebook. what we need to do is bring that converts -- the constant improvement to the way we deliver a lot of public goods and services. it also creates a virtuous cycle in which any increase in the functionality of the network increases the ability to do new applications and the desire for better devices. you get a virtuous investment cycle that drives new
5:17pm
productivity gains as well as economic growth. it creates demand for things we did not know we needed in -- did not know we needed. 70 million americus keep track of their families on wireless devices. gps came out of a government program. it was the reagan administration that kind of opened it up in a way that the obama administration has opened up certain data i will talk about. it led to this industry. that is the innovation we need. it is a digital platform that is always on. it is not 9-5 for five days a week but it provides very valuable things 24/7, 365 and this is critically important.
5:18pm
the best for one as the best for all. there really is no 99% or 1% when it comes to the nature of internet users. i suspect all of us use a similar search engine. but my doctor who went to a very fine public high school needed some -- when my daughter went to a very fine public high school and needed some assistance, she went to a popular brought back connection. it is a platform that simultaneously allows us to improve life for everyone while we are specifically approving it for an end -- and individual. we think of it as simultaneously doing globalization. one of the most important things that allows is that personalization. it allows america to create new export markets. we have seen a lot of entrepreneurial ventures coming
5:19pm
out of the digital platform. the new america foundation has done a lot of work. the paper -- the others are going down, not up. i think this is one of the areas where we can kind of counter some of the trends they point to a writ the strategy is to accelerate the move to digital. we are at a special moment. we want to accelerate because productivity gains today mean economic -- better economic growth tomorrow. it is the only way to deliver some of the things we needed in health care and education and because leadership matters. that the united states accelerates this movement. we will have the opportunity to lead and again export. in health care, we are going to build on the electronic all
5:20pm
medical records. keep things being the utilization of that data for comparative attractiveness. utilizing a strategic ban with approach to big band with applications to make sure believed in things like kinetics existing -- sequencing. or using 4k cameras that can improve how we monitor certain people. we want to accelerate pharmaceutical and the nation which is now possible. but to make sure that government eliminates a restrictions on network based medicines and provide incentives for more utilization. dickey in education is to use data for personalization. we need to accelerate the movement to digital content. we need to require constant assessment and enable transparency for parents and teachers to constantly evaluate
5:21pm
material which would not be possible on an analog platform. we talked about how we can provide incentives and we suggest moving some of the funding to fund new experimentation with this century's leading network. and we have to make sure that data caps do not interfere with kids getting a good education. we talked about use light -- the utilizing the same transfer public safety and how the first proposal can be utilized to drive more private investment. there is any further applications that people can in a time of some kind of public safety emergency gain access and necessary information both from the government sector and
5:22pm
essential facilities such as electrical providers. we need to utilize -- move all of the government over to that digital platform. the need to get rid the paper -- we need to get rid of paper. we need to make sure that we only take in -- information once i get a writ of forms. there is the technology sector's private data vaults which can dramatically reduce the time and effort to reduce those forms. is to just -- we suggest myproblemssolved.gov which allows someone to get put -- put in an affirmation and get access easily. to what kinds of programs might be available for help under a comprehensive out a rhythm. we want to use that secure
5:23pm
platform which is now available to solve problems of voting. we really suggest that there are ways in we did there have been a number of studies that suggest savings in the neighborhood of $1 trillion in the next eight to 10 years. in the negotiations, we suggest something like the commission is established to deal with how do you utilize technology to drive those kinds of efficiencies and savings. part of the problem is, it is difficult to put up front money in making that transition. this is a onetime transfer to leading-edge technology for the government so we can be the first real all digital government. and move to digitization is a shift but it has a lot of jobs
5:24pm
at stake but not necessarily a job destroyer. the money saved help fuel demand for things like cars, appliances, travel. all this created new jobs in the economy of the last century. we have to retain -- retrain issa david apart of the work forces. we want to create some kind job retraining for the jobs of the coming century. it is a lot easier to do that on a digital platform which is always available and can be in somebody's house. but the close by saying that this spring reeves celebrated the 150th anniversary of the very extraordinary congress that recognize that our country need to have the most productive land
5:25pm
in best transportation to get crops to consumers and the best minds. the homestead act and the railroad at -- act, responsible for the wonderful public education leading institutions we have are the most important asset we have the 21st economy. today knowledge and power are the two key inputs to everything into the economy. we will continue to grow and to lead. thank you. [applause] >> there are several seats up front if anybody in the back would like to move up. i have a somewhat different take
5:26pm
on this. i will start with a fairly famous american that was well beloved, ben franklin. he said those who are willing to give up liberte for security deserve neither of them will lose both. a 21st century version of the broadband would be something like those who would trade freedom of speech for [inaudible] will get needed. the private sector companies in the u.s. had made it clear they will not deploy its credit first century communications network. but comcast rise in joint venture leaves us with a clause i duopoly. which means the only thing that will stop them from taxing speeches public policy. the vast majority of americans have a cozy duopoly where networks are not good substitutes -- dsl vs cable
5:27pm
modem. with their could've been vigorous competition between reasonably competitivenes. a small number of americans face a no-opoly. the odds are the communications companies will not deliver. a dented the 1980's, companies they the 1990's, demanded acceleration. they took the money and never build the network once. now they call policy based uprising. they will not make binding commitments. it is time to face reality. it is time to give up the
5:28pm
fictions that competition between platforms will insure universal service or freedom of speech. it is time to admit it will not be a sufficient number of well matched rival to protect consumers from abuse or deliver the benefits we normally associate with competition. which starts with a villain the strive to innovate and invest. it is time to recognize the 21st century communications network will not be built without public support. as has been the case with every other national network in our continental economy. it is time that the digital economy provides much greater support for the next-generation of infrastructure. a free ride is over. we have to build the infrastructure and the digital economy has to pay for it. it cannot be at the discretion of the phone company. for they will take the money and not give us the not work.
5:29pm
the social contract that successfully built the 20th century and the structure and made the 20th century the american century in the economy was based on a fundamental principle -- freedom of speech, universal service, and nondiscriminatory action. the social contract needs to be updated. but the fundamental values should not be abandoned. we need an incentive structure that ensures the network will be built and the regulatory structure to assure we have the full benefits of competition on the platform, not between platforms. we already have the model in late 1960's to the late 1990's. this is the environment in which the internet was born and grew. the department of defense supported a decentralized communications network or the objection of the telephone companies. the federal communications administration in the 1960's --
5:30pm
over the objection of telephone companies. by creating a space between the market and the state, the u.s. government created a government -- an environment where innovation and entrepreneurship thrived. the government stepped back, internet governance remained between the market and the state. as much as people complained about ican, the intention was to keep it between the market and the state. the same approach was used in the mid 1990's to greet the y 5 merkel -- upgrading america wifi wifi merkel. both the government and the income and telecommunications companies were held in check.
5:31pm
we must institutionalize this model. between the state and the market. by developing participatory government in which there is critical operation between industries, civil society and technology. we must preserve the fundamental commitment to public policy. this approach works in the anderson -- energy sector too. in electricity, the recipe will have to have a bit more because the economies as scale are much stronger and electricity is a non storable commodity that is difficult to transport. the challenge is essentially the same. to decentralize decision making.
5:32pm
to allow this centralized decisions on the monopoly platform. he used a monopoly platform. the transmission grid and the distribution grid. we have to hold in check the incumbent utilities that will despise the idea of decentralized decisionmaking. neither the 19th century approach and on regulate the market power nor the 20th century approach of command-and- control regulation will work very well to the liver emblem -- permission and electricity, the lifeblood of our dynamic diverse 21st century economy. we know the model last between the market and the state. but ben franklin and exited the continental convention, a crowd gathered to ask -- what have you given us? he entered, a republic, -- he
5:33pm
answered, a republic, if you can keep it. thank you. >> i like to thank the new america foundation for having me here today. markell for organizing this session. it is a great honor to be on this distinguished panel and it is always a great pleasure to be with my friends and former colleagues.
5:34pm
they have made a wonderful presentation. as is always the case, it does not lack for ambition. and the tackle important problems. i very much agree with them. whoever the next president is, getting a memo on what should be done in these two sectors is very important. what i have not heard yet from is exactlylilair what needs to be done. is there any for more regulation? there's been enormous progress made in the energy sector of the past years.
5:35pm
if the technology is improving youording to morre's law, do not need government intervention. it applied to the microchip industry. the microchip industry did not have -- have government regulations determining what manufacturing would be or how we go moving forward. it is an example of how the private sector will work when there isn't excessive government regulation. what they did not mention and perhaps they will in the book, is whether there is any necessity for change is involved. i am sure there would likely agree that in discussions with the investment community and the management team is a major corporations, one of the major problems in the
5:36pm
telecommunications sector is holding back investment. is uncertainty about what the government will do, what the rules of the road are. it has been an ever-changing world. great amount of money invested into the 1990's. and those are radically change. many investors as spoke with said i will never invest in the committee since again. i did not know what the rules of the road are. it is very important to get this straight. our hope that will be part of the message they provided the tether book -- they will prov ide in their book.
5:37pm
given the government back to following what the law actually says and regulate what is required of the law but not where the law does not requirement -- require it. those of the keys to success they have both describe the enormous progress in the past four years. i think the challenge for the next president -- how do you get these sectors going? timmy the right approach is a clear role law is that the government out a way. >> thank you. [applause]
5:38pm
>> i will wrap it up in the making get to discussions and comments. i am michael calabrese here at new america foundation. i would start by -- with some an agreement with reed and balir about -- blair about the need to redirect our national policy priorities for managing scarcity to facilitating abundance of both energy and connectivity. because power and broadband are not ordinary products traded on remarque its. the are not even let the cool of prices the devices they use faster chips. broadband activity and energy are put into everything else in
5:39pm
the economy. they make everything else more productive as well as our lives better. as a result, upgrading our core, infrastructure should be a priority for investments, just as it was a junta years gone by for canals, airports, and the interstate highway system. all of which was undergirded by public support. focusing on bob ben, i would like to suggest -- ob braodband, i will like to suggest -- on bradband, i suggest they go further to support abundant and with at affordable prices.
5:40pm
first, i believe the nation needs more public investments in middle mile fiber in particular to drive it into every community open fiber and not a government run networks at all. second company to prioritize spectrum sharing, particularly on the very much underutilized federal airwaves. and make more on use public spectrum capacity at low-cost. something that is a policy and addition to auctioning limited amounts that can be auctioned. blair has the knowledge it is important to drive the fiber deep into networks. that is what his gig.u initiative is all about. there is another facet to this.
5:41pm
almost as the prior -- a step prior. the u.s. still lacks a building fiber block. that is why in new america was one of the founders of this health broadband initiative a few years back. what the shelby coalition advocated with gigabit connected the. if you put a gig to every elementary and high-school, you every community
5:42pm
and have an open intersection requirement. the obama administration went along with that. they shifted its priorities and agreed number of grants went to middle laugh fiber and for structure. i've been one a week ago in west virginia. wv net -- they are using for schools and other public sector institutions. if public fiber have a system open to any, can facilitate initial deployments and competitive overbuilding. it is also disrupted because currently the dominant isp's have a stranglehold on the special access market. the competitive carriers like t
5:43pm
mobile and wireless carriers cannot get back call for their cell phone networks. without purchasing it from the dominant incumbents. primarily, same with businesses. a chain of banks cannot connect all the branches and atms without going hand on need to the incumbents to get access to their fiber. we had more open access public fiber running ever wear , we would be a huge step for the second and final thing -- a great opportunity for abundant in riotous connectivity. spectrum scarcity has been used
5:44pm
now recently to justify things like bandwidth capps and pricey tiered plans. and the substitution of 4g wireless for slow dsl. this conventional wisdom is not quite right. some of your tired of hearing me say. was yours are licenses from the government deficit and business model -- exclusive use of the public airwaves over wide areas using their centralized and the stricter and bill you minutes or bandwith. about a week ago i was it to chicago. they had a spectrum observatory on the roof 22 stories above
5:45pm
where they also connect the video surveillance for the chicago police among other things. they will tell you can go on-to their measurements. less than 20% of the prime frequencies over the city of chicago is being used at any given day our time. so there's tremendous abundance but there is a scarcity of exclusive likeness. the alternative is a more destructive strategy. make share spectrum taxes abundant. and adopt and enforce regulations to give the vice makers -- device makers and consumers the ability to choose which of network is most cost- effective for their use from second to second.
5:46pm
and that -- in most places and times, if you have rock by, you have an iphone. increasingly what the consumer and a vice will choose will be short hops at low power over share spectrum into high- capacity wired back hall that is already there because you're buying it from comcast are time warner cable. that will be much better than sending everything long distances over million-dollar airwaves into such a built carrier in for a structure based on large cells instead of small sells trees spectrum uses how we get the efficiencies and make it abundant. to close, a year ago, i published a paper.
5:47pm
so much of the capacity is unused, to a degree of the abnds held by the government. when they needed, they really needed the most the time, they are not using it. the president's council of the visors on size and technology. i was part of a report to camps -- came out a few weeks ago. they were having a trench warfare are one federal band to see if the can move the military out an option it. that is fine. god bless them. but the fight it out in the meantime, there are 1000 make hats -- megahurtz. we can create an abundance will will be disrupted to the
5:48pm
wireless market, spare more entry and innovation and be in step with the theme of blair and reed's work. thank you. [applause] >> ellen to give blair and reed and opportunities -- i want to give blair and reed an opportunity to respond to anything they heard at the last few minutes. >> i will respond to merrill's. the comments were very courteous and salient. i love the fact that you agree the two platforms are right strategic goals. you asked what -- what are the substantive ideas. these are in the draft right now on the energy platform. we ought to have changes with an
5:49pm
eraser, not the other side of the writing implement. and changes in the regulation and the law with respect to mortgages, taxes, utilities, and the environment. specifically epa has been in a never ending battle with congress and the courts about its regulations. it is much better for industry 50 epa regulation 50-- if the epa regulation of things that pollute or laid out clearly, endorsed by the courts, and no longer the subject of congressional efforts to overturn by statute. business would rise to the occasion of investing to that plan. utilities are principally regulated as you know at the state level. we really need a federal law that to some degree of resemble
5:50pm
the 1996 telecommunications act, meaning that at -- act made some modifications but did not take the jurisdiction away from the states. it made some modifications of what was permissible. the federal law i would like to see that we see in our book with respect to utilities ought to make space toward utilities for investing in energy efficiency and renewable. instead ministate discourage investment in these activities. in order to maintain the status quo. states also raise obstacles to mergers which are useful mergers in the utility area because they create greater economies of scale. states do these things for a reason that makes sense in the state but not the nation as a whole. let me give you a test case. can you name any international wireless carrier?
5:51pm
horizon -- verizon, sprint, at &t. there is no national energy company. in the is no national energy service company. there is hardly anyone in any cities in the united states served by the same people. this is an artifact of a network resembles the same vein that edison had attended his mind. it does try to move behind that. almost every single house in america will have a lower energy bill if it does either one of two things. put solar on the ruth or puts installation in the walls. it usually does not need to do both. you are one of 25% of houses,
5:52pm
they will put solar on your roof and try to lower prices for electricity. you ought to be able to get better lighting or windows also financed, except for mortgage law does not permit you to put the financing on a mortgage. there is a lot of the plumbing that needs to be reached - plumbed. it is not necessary to have a new stimulus of the bunch of sayn former regulators to we can change all of these rules and laws so they are pr- investment. as far as tax policy is concerned, i will say one thing. with all respect to governor romney -- not a good idea to start taxing wind in the united states more than it has been
5:53pm
taxed for the last several years. the department of energy under president bush published a plan that says 20% of our energy can come from wind. it is not a good a deal to change the tax laws so attacked the industry more so that we are less likely to achieve that plan. because it is anti-investment. people under the age of 30 today will be sent by% of the work force by 2020. if you're here is my color or one area of abundance you like - you lack is hair at al, l, your job-- all, your job is to make sure there is a sustainable set of careers for those in because they will be 75% of the workforce in eight years. working on his five forms is the right direction for america. -- working on those platforms is
5:54pm
the right direction for america. >> i'd really appreciate mark's comments on social contract. i am giving a speech on friday where i will address something similar, but i think of as the new communications social contract. but i will wait until then or another question but i agree the current contract is in the process of becoming absolutely. i focus more on the digital platform in which government can do because that is what the low- lying fruit are. if we can improve things in this country by understanding with the digital platform is. there's also something more i think have a different point of view from both mark and harald. the challenge now is on the demand side.
5:55pm
the supply side, we had tremendous upgrades over the last 15 years. harvesting there upgrade. i disagree with carol that uncertainty is a problem. if you look of the stock market performance over the last year, it is and fantastic. they're certainly making money. the fundamental problem is one of demand. this is been a lot of the work we have been doing on gig.u. how do we have network -- demand leading networks that drive a cycle of an upgrade? i will step away from that. we do have some things in the book on spectrum. kind of following up on that work. i agree that if we want to have ben with abundance, we have to have -- bandwith abundance, we have to have smart policies and ways in which we lead the demand
5:56pm
to create the private investment i really think can do it. there was a huge private investment into the sector -- that is the kind of things we would like to see with energy. particularly in those areas where government is the major buyer or supplier and to move those tough forms to make sure the government does it in a way that is digitally smart. >> i went to continue on that theme cable is likely to have a monopoly. >> if you define that as the market. but their margins on broadband are already fairly substantial. one estimate is 95%.
5:57pm
they are also here vertically integrated. odband speeds on br interest the consumption of internet video. what is their expansion at this point? he said demand alone would drive an upgrade. with its extensive at this point to upgrade their networks? where will the competition come from? >> you seem to be quoting speeches i have given on behalf of gig.u. the incentive to upgrade -- that is whthe point. the daye the president after the election and you're trying to do -- to develop a growth strategy, you want to look a what can you effectively do? what are the levers of
5:58pm
government where you can drive economic growth and a rising standard of living for all americans? i think the kind of things we outlined in the book are things the president does have the kind of control over. largely by the way of the executive branch. i think that is where i would focus. in terms of competition, it is a complicated picture. i've spoken and lot on it. i did not want to bore people with repetition but at the end of the day, you fundamentally do not have the math in place or the of grades -- for the upgrade. but we're doing gig.u is trying to figure out how can you change pgradeath to drive the uypgrad by increasing revenues and
5:59pm
system benefits and competitive opportunities? i think when you look at what google is doing in kansas city, you see the wisdom of competition. they went into kansas city, time warner a few days later. right after the announcement, announced an increase in speed. at a bid from 3 to 50 and now have a temper cent increase in their work force. i am in favor of that treaty will have to explain to me what you would do other than unbundeling. i think that would -- it does not drive investment for growth. if tillich the european example, there are problems with it. if we suggested it putting aside the politics, it would have killed a lot of other investments and jobs.
6:00pm
i do not think that is a path forward. i do think it is tricky but we have to find where there -- where there are opportunities where market forces can drive the upgrade. >> the cable companies and telephone companies are interested in scarcity, not abundance. that is the way the price things. the hope that if they're not pushed by competition, they will create scarcity. it is one of the reality is we have to -- the fiction's we have to give up. the way you stimulate demand on a broad scale across continental economy is not by picking little places and say we build that there. now here is a demonstration project, everybody do it. you build it there on demand and on the supply side.
6:01pm
you have to have a model where the private sector can now do its thing and the internet and wifi are prepared examples, the best examples we have of true, deregulated markets. it was easy because the rules made it easy. without those rules, they would not have made it happen. if i look at the cable space and the operating between cable and fios, which is the only place where you have reasonably match competitors, they will both make sure their platforms are open to competition. it will moan and groan about how they thought they could make more money by job -- jacking up the price, which is what people who specialize in scarcity do, but we know we will be better off if we ensure competition on the platform. that is the model we need and it involves a targeted places where yousay, i'm going to tie
6:02pm
down in this space, constrained your instincts to slow innovation as long as i create a space where i get innovation from outside. that is the model that works. mike mentioned a series of national quasi-monopolies. and it is electricity, roads, airports and the national highway system. those do not work in the 21st century. those were static and stable and undifferentiated products that you could regulate that way and hope that we fill it up. we need something different for the 21st century. >> any other comments from the panel? turn to usage-based pricing now. oh, sorry, go ahead. >> just very quickly, there are
6:03pm
no laws that prevent companies from offering broadband services in the u.s. nothing prohibits telephone companies from investing in broadband. nothing prohibits give companies from investing in broadband. nothing prohibits other companies from coming in and offering these services. what the market reveals is exactly what blair was saying, that companies are making decisions every day and determining they cannot make money on investing more in this service. it is not a legal and regulatory impediment at this point. >> the law of economics is the in pediment. this is an industry that tends toward monopoly, or at best, duopoly. a lot of people thought that what happened, and now we see it. the question then becomes what public policy does about it. we could have four competing
6:04pm
broadband pipes, full-service, 100 megabit pipes. it is not going to happen. we cannot even get two. but once you read it that, then the public policy becomes how to make sure you read these to get one good one, and then the full benefit of competition on that pipe. the laws of economics apply on both sides of the congressional aisle. >> let's turn to usage-based pricing. the chairman has endorsed business models of usage-based innovation and has said that it could be a healthy part of the ecowas system -- ecosystem. what do you see as the role for the sec and the chairman in encouraging an environment of the abundance rather than scarcity? >> as read talked about early
6:05pm
on, if you see your mission as abundant, then you have strategies to making it so. it involves a number of things. getting this country into a strategic band with advantage and getting psychology of consumers to abundance will drive a lot of economic activity, particularly in terms of the new markets and would talk about with a band with an education. i do think that i would be very reluctant to have government involved in the micromanaging of the pricing of the surface -- service or the nature of the service. i would not have a government intervention in that area of usage-based pricing. i do think there are public goods such as emergency
6:06pm
services, public health care, where it it turns out that the usage-based pricing is discouraging the utilization of networks for those public good, that is something that the government has to look at. we chat about that in the book a little bit, too. >> let me ask some questions. these are not the suggestions that we are definitively putting in, but they are questions. suppose that the government said the following to medicare providers cocotte on such and such a date, it all of your services -- to medicare providers, on such and such a day, all of your services have to be provided on a mobile broad band the system. would that create demand? is it a good idea? would be a useful service? i suppose? state government would -- were
6:07pm
to say that all of the textbooks in high schools have to be available digitally. you can have a paper, too, if that is where you want, but you have to have everything in a digital format. would that create demand? with that drive new services? would that be a platform for change? suppose that the state regulator with respect to energy said to every utility in its jurisdiction, if you lower the bill that blair is paying in his house by providing an insulation, you get to recover the profit on the amount that you are not providing. you can make a return on your investment. these are called megawatts. in a few states do these -- discussed. most states do not. creating a demand for efficiency. these are all ways that demand can be created by this major player in the economy, which is
6:08pm
called government, sometimes local, state, sometimes several. about 7.8% of all the people in the u.s. work in government. that is about 20% of the work force. suppose that any level of employment in government had all of their salaries and all of their personnel records provided in a digital format and the deposits were automatically digital in an electronic savings account. in most places it can be done. in no place is absolutely necessary. would that create demand? these are many different ways that we could attack the problem of demand creation without saying that we have to have another $1 trillion of stimulus, no, we cannot, yes, we have to, no, we can on. let's try to tap resources to
6:09pm
try to create abundance. >> i want to ask a different question. i am a mobile die, you know that. -- a mobile guiy, you know that. the question i would ask is, do you observe a porosity of demand for mobile broad band as a a result of specific applications and services that people want? i think you have asked the wrong question. that is the one area where there is no demand. the minute people can get broadband, they will grab it and use one of those applications out there. >> i agreed. i'm just saying why don't we see an upgrade on the wireline side. >> but of the suggestions that you have made to stimulate
6:10pm
mobile broad band -- the mobile mariko, as it is called in the rest of the world, achieves the penetration of mobile voice with less wireline ended when six the time frame. the challenge is to get that to be a mobile broad band revolution. they will take it up. >> the mobile broad band growth is absolutely terrific. the mobile broad band growth with respect to the provision of public goods is not. meaning, it fundamentally has been driven by for almost everybody by entertainment. that is not bad. but the whole thrust of our book is a, let's double down on what is doubling. >> a street map that helps me find stuff and get around, that is efficiency. >> we can debate this offline, but with all due respect, i'm absolutely positive that the
6:11pm
revenue lies in personal entertainment. it does not lie in any of the services that i'm talking about. you look at the education market in the u.s. and almost none of it is digital. you look at the delivery of public goods, such as security, almost none of it is mobile. >> we started this -- someone was asking about band with caps and tiered pricing. read and blair both passed up an opportunity to to their own horn because it occurred -- did criticize the current chairman of the sec. to avoid a policy of managing scarcity, you made a conscious competition policy. and blair, when he spoke, alluded to the fact that when
6:12pm
these guys were running the sec and we were in the analog cellphone era, remember, you paid high prices for little buckets of minutes. it was buckets of minutes for lots of money, and it was almost a luxury to have a cell phone. there were a number of colleges competition policies that blair mansion to reduce the terminating access charges to the plain old telephone system, you know, to the copper, which really greased the wheels for spectrum auctions. the two dominant carriers that started with free spectrum could not just roll up all the spectrum. it achieved their goal of having 45 wireless competitors in every market -- four or five wireless competitors in every market. romy was required, which meant
6:13pm
that regional and rural carriers actually existed and you would not just have national. and you ended up quickly with unlimited packages of minutes. and it suddenly for voice was not the issue and in pricing you had abundance. the what you needed was a conscious competition policy. wireless is tougher to get to abundance. you cannot do it without a conscious policy. >> the economic council, or the usage signaling on price is simple. it is a competitive marketplace, the usage caps will be cost based. and it is not, they will be rented. in one space they may be rent seeking and in the other space they may be cost based, depending on the level of competition. >> i will go ahead and open it
6:14pm
up to questions from the audience. which for the microphone, identify yourself, and your representing organization or company. >>, steve wallace from tech minions. saying that most of the demand is coming from entertainment is correct, but rather misses the point. the fact is, entertainment, particularly hd video, demands so much band with that no matter what else people are doing, a total ban with consumption is always going to be dominated by video. one hour of netflix is probably a lifetime of cannes academy videos, even comparing video to video. you have to look at not just the band with consumption, but the time consumption on the part of
6:15pm
consumers to understand what is going on out there. >> any response from the panel? >> [indiscernible] >> i am with comstock consulting. i want to pick out two. bekaa reid and blair raised -- a two points that reid and blair raised. nobody mentioned their dreaded word, and kerridge. that has been well litigated and tried. -- common carriage. that has been well litigated and tried. we have certain facilities, whether there is a monopoly, duopoly, even a court probably -- a quadropoly that you could argue. what is interesting is access to
6:16pm
the luttrell grid and what states in competition have done is essentially, provide access by devices, namely the generation devices, to a common carrier grade. that is what is leading to the success of green energy. you are able to put your energy back on the grid. in telecom, we have done the reverse. we have removed access devices. 20 years ago, congress said in the 1996 cable act that you are supposed to provide access devices to cable. 20 years later, we do not have that. it is not that we need to boost demand. there's plenty of demand out there. if you look at what consumers pay for communications, it is five times what people were paying for it back in the 1990's when we had the cable act and the 1996 act. there is plenty of demand, but what is missing is access for devices. that goes to the usage based as well, which is, if you could
6:17pm
put the devices on those networks, whether it is access to spectrum or fixed wire, you would see people responding to the increase in prices by creating more efficient devices to more efficiently utilize the spectrum that is available. it is a simple regulatory requirement, but it is the key that is missing in the telecom world today. >> you are making a great point. i will let blair pick up on that night observation with respect to the knowledge platform. -- that nice observation with respect to the knowledge platform. >> we do not have the emergence of something like wireless to wireline, which is transformational, as ever but a nose to my nutella, area. electricity wireless was called lightning. you do not want to buy some of that were hit your device.
6:18pm
but there are two major areas of opportunity for different kinds of network architecture and energy that have emerged in the just the last few years. number one, all of the electricity looks and feels the same. there is no such thing as a video version of it. you do not have the ability to distinguish the product by its wrapping in the form of content. however, there are two fundamentally different ways to consume it that have different architectures. this is what to pick up on what harold said earlier and we said in the book, where to change laws for regulation and open doors for private-sector investment. the area never one is distributive energy. that is when the solar panels are put in a park and shared by a everybody in a surrounding area. it is a common solar solution of
6:19pm
what they put on their house. they are not on the other side of the meter. they are not on the other side of the utility distribution network. yourself providing electricity in a community or at home -- you ourself providing electricity in a committee or at home. this is potentially really huge. financiers and installers want to be in this business, and the regulators need to open the door to them to be in this business big time in every single state. probably about 30 to 50 states are highly desirable. the u.s. is very blessed in solar. the worst place in the u.s. for solar is only half as? -- half as bad as the best place in the u.s. for solar, meaning because of our latitude the ranges are really great.
6:20pm
take the out liar case for everything, alaska. in the summer, it is a great place for solar. the averages are extremely appealing for everybody. but that is not the -- part of the traditional architecture, and it is a threat to the traditional regulatory approach to the electric grid. here is the other opportunity. what is a network for delivering, the opportunity for transportation? it does not exist. there is no one who says that the government has cleared out of the way and given me a chance to go ahead and build that. governments at every level are in the way of anyone that might want to build a real charging network, or really collect profits for doing that. in any particular state, we do not have more than a few models or examples. there is no national plan for an electric grid. it is totally a chicken and egg
6:21pm
store. all of the eggs are saying, where the chickens? and of the chickens are saying, where are the eggs? if you go through the cycle of advances that i talked about earlier with respect to batteries, you can see a tremendous transformation. we average about two vehicles with every household in the u.s. of those two, in almost every case, one is extremely suitable for fairly short distance driving. and the other is the one that should be used for long distances. roughly speaking, the electric vehicle in the market -- the electric vehicle market is about 100 million vehicles in the u.s. if we brought from the confused, distant, non-transparent prospects into reality the ability for people to say, is now worth me making the purchase, if we brought that into the second term of the obama administration, or the first term of the romney administration, if we brought
6:22pm
that kind of growth prospects, it would be an astounding boon to the economy. >> any other thoughts on the panel? mark? >> the thing that concerns me is that the common carriage in a long history of discrimination is the exception, not the role. every time you use it, there is a heart attack over on the utility side of the room. the simple matter that we achieve nondiscriminatory access into the means of communication for about 400 years before we had common carriage. i am embarking on a timeframe where we may have 150 years in this new environment, and maybe we can achieve nondiscrimination without the concept of common carriage. we need to agree on a goal that we want to achieve. and it may well be that a lot of the common carriage developed
6:23pm
over the last 100 years is a big part of the problem, because it is such a thicket and we the side of the birds above where we want to go. but i agree entirely, if you look at the internet and if you look at the carter phone decision -- let's remember, for 30 years, every device that connected to the internet was made possible by carter phone, which said, you can plug in. that was a device and the network operator was also not allowed to get in your way. if you look at wifi, the exact same thing happen. they said, you can use that space, but the rules were amazingly efficient and brutally simple. now everyone is saying they want more complex world. the minute you want that, you'll get regulators involved and you also get people who understand how to manipulate those rules to get in the way of competition. i want to focus on nondiscrimination and find the
6:24pm
simplest set of rules to accomplish your goal of device connectivity. >> for the sake of the c-span audience that may not be familiar with the 20-year history of the set-top box that we dealt with in 1996, or maybe did not deal with, and then again tried to address a national broadband plan, i would simply say that i agree with mark's history, that the value of the carter phone may be the single most important innovation in terms of growth. and i would add to that list. the chairman of the sec, what he did when he was on the sea block -- c-block and his work on spectrum was all good. maybe you could tell me, offline heil if you had that
6:25pm
will you drive the wireline aside with the simplicity that i think you are looking for. your work demonstrates that you need that simplicity. how would that suddenly drive an upgrade? i do not think it would. but i'm happy to have that conversation. >> we are a little bit over on time. i will take final questions. one or two, and then the opportunity for a final statement as well. any additional questions? >> i am judith. i work with smith, dawson, and anders, a government relations firm. it i was intrigued by your suggestion of creating demand through public sector facilities, libraries, schools, government, public records, those kinds of things. but in this economic climate, and i know you are trying to avoid the controversy of additional stimulus -- state and
6:26pm
local governments would need help to meet that kind of demand. i do not see within the context of their struggling budgets the ability to do? and in in a third -- to do that and in an officially tied to manar -- and in an inefficiently time to manar for that to kick in. the'm very conscious of constraints on government at all levels right now. part of what we will be laying out are different approaches to it. when you look at how local governments through a series of different actions can actually lower what they pay, but drive an upgrade, and this can be in a variety of different ways. and what of the great things that the u.s. government did in driving the kind of change that has been talked about was to
6:27pm
have the gsa be a leader and say that we are going to purchase screen materials for our -- green materials for buildings. you get across driven down then and you have a wonderful local situation. you have the state and federal government combining to achieve some kind of innovative uses. you can drive energy efficiency and you can drive abundance. >> any final statements from the panel? >> i will make a final statement. the federal government right now spends about three -- $3.6 trillion and takes in $1.3 trillion less than that in taxes. that is why the toward deficit has gone from about $10 trillion to about $16 trillion, or about
6:28pm
100% of gdp, in a frighteningly short timeframe. no one worried about the long- term health of our country. no one worried about whether anyone under the age of 30 right now can take lightly this extreme imbalance in the deficit. the timeframe of 1995-2000, five fabulous years in terms of the federal budget, were years in which the gdp averaged a growth rate of 4% per quarter. if we all could wave a magic wands and have it be that the growth rate was 5% for the next five years, or even better the next 10 years, that would do much more to close the federal deficit than any outcome that could be negotiated between the two parties. that does not mean that a magic wand will do the trick.
6:29pm
but it does mean that having a growth agenda be a central part of the discussion about the deficit is the best thing for all concerned. it is -- i'm not saying it is the only thing. it cannot be. the $1.3 trillion deficit is a big hole. and just saying that we will grow our way out of it is not what any reasonable person should say. but on the other hand, having no growth agenda, that would be self-inflicted injury. >> if i could follow up on what reed said, those years c'mon president clinton -- those years, president clinton in the 1996 state of the union address, he said the era of big government is over. those years were also relative to prior years. it was a deregulatory time. i would